Isondo's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2015 operations.
$$\begin{array} { l r }
\text { Sales (1,200 televisions) } & \$ 1,200,000 \
\text { Cost of goods sold } & 540,000 \
\text { Store manager's salary per year } & 108,000 \
\text { Operating costs per year } & 216,000 \
\text { Advertising and promotion per year } & 24,000 \
\text { Commissions ( } 3 \% \text { of sales) } & 36,000
\end{array}$$
-What were total fixed costs for 2015?
A) $924,000
B) $576,000
C) $348,000
D) $224,000

Question

Isondo's TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 2015 operations.
 $$\begin{array} { l r } 
\text { Sales (1,200 televisions) } & \$ 1,200,000 \
\text { Cost of goods sold } & 540,000 \
\text { Store manager's salary per year } & 108,000 \
\text { Operating costs per year } & 216,000 \
\text { Advertising and promotion per year } & 24,000 \
\text { Commissions ( } 3 \% \text { of sales) } & 36,000
\end{array}$$
-What were total fixed costs for 2015?
A) $924,000
B) $576,000
C) $348,000
D) $224,000

Quizplus · Accepted Answer

Fixed costs include the store manager's salary ($108,000), operating costs ($216,000), and advertising and promotion ($24,000), totaling $348,000. Commissions and cost of goods sold are variable costs.

Isondo's TV and Appliance Store Is a Small Company That